Ethereum gas fees are on the rise once again. The launch of Uniswp’s UNI token is driving gwei prices higher. In fact, the protocol has generated over 5% of all gas used in the past few hours.
UNI Token and gas Fees
Paying gas fees is crucial when trying to use the Ethereum network. Under most circumstances, completing the transactions can be done quickly and for a relative cheap price. Today, and perhaps the coming days, may prove to be very different in this regard. Current gas fees are rising very quickly, primarily because everyone is trying to claim his or her free UNI tokens.
These tokens are the governance token of Uniswap, the top DEX in the cryptocurrency space. Anyone who ever used the platform can check if they have free tokens to claim. As more users explore this option, there will be a hefty increase in Ethereum transactions. As a result, the gas fees will keep rising until things settle down once again.
When that will happen exactly, is difficult to predict. Current gas fees depict an average price of 700 gwei, or $5.57 to complete transactions. A fast transfer takes 770 gwei, or $6.13. While these fees are not entirely uncommon, they will cause some issues for Ethereum holders regardless. Keeping in mind how active the Ethereum network is, this may be merely a sign of things to come.
Uniswap Dominates the Charts
It is interesting to see how successful Uniswap is on the gas gees leaderboard. The project claims three of the top four positions ranked by gas used in the past 3 hours. Its UNI token distributor contract has generated over $1.16 million in fees, or 23.4% of all gas in the past few hours. The regular Router 2 contract – used to trade tokens and provide liquidity – represents 17.7% of all fees. The UNI token contract itself comes in fourth spot, with just over 11%.
The only other entity in the top four is Tether. Its USDT issuance on Ethereum has become notorious for spending high amounts of gas. It is another contributor to higher gas fees at any given time. Combined with the UNI token excitement, things are bound to get interesting in the coming days. No one should expect to perform cheap – or fast – Ethereum transactions for some time to come.
This situation will undoubtedly spark demand for layer-two scaling among Uniswap users. Implementing solutions such as Loopring will be beneficial for any Ethereum DEX. At the same time, it reduces gas fees, which doesn’t affect the earnings of the Uniswap team whatsoever. An interesting situation worth keeping an eye on.